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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(MARK ONE)
X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
--- SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
OR
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
--- SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to __________
Commission File # 1-4252
UIC 401(K) RETIREMENT SAVINGS PLAN
(Full title of the plan)
UNITED INDUSTRIAL CORPORATION
(Name of the issuer of the securities held pursuant to the plan)
United Industrial Corporation
570 Lexington Avenue
New York, New York 10022
(Address of principal executive office)
NY2:\926058\02\j%j%02!.DOC\78495.0001
<PAGE>
REQUIRED INFORMATION
Item 4.
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The financial statements and schedule of the UIC 401(k) Retirement
Savings Plan for the year ended December 31, 1999 (attached).
Exhibits
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23.1 Consent of Ernst & Young LLP.
2
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AUDITED FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULE
UIC 401(K) RETIREMENT
SAVINGS PLAN
Years ended December 31, 1999 and 1998
with Report of Independent Auditors
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UIC 401(k) Retirement Savings Plan
Audited Financial Statements and Supplemental Schedule
Years ended December 31, 1999 and 1998
CONTENTS
Report of Independent Auditors........................................1
Audited Financial Statements
Statements of Net Assets Available for Benefits.......................2
Statements of Changes in Net Assets Available for Benefits............3
Notes to Financial Statements.........................................4
Supplemental Schedule
Schedule H, Line 4i -
Schedule of Assets Held for Investment Purposes at End of Year........8
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Report of Independent Auditors
Administrative Committee
UIC 401(k) Retirement Savings Plan
We have audited the accompanying statements of net assets available for benefits
of the UIC 401(k) Retirement Savings Plan as of December 31, 1999 and 1998, and
the related statements of changes in net assets available for benefits for the
years then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1999 and 1998, and the changes in its net assets available for
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
held for investment purposes at end of year as of December 31, 1999 is presented
for the purpose of additional analysis and is not a required part of the
financial statements but is supplementary information required by the Department
of Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
Harrisburg, Pennsylvania
May 19, 2000
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UIC 401(k) Retirement Savings Plan
Statements of Net Assets Available for Benefits
DECEMBER 31
1999 1998
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ASSETS
Investments $112,883,353 $94,885,060
Due from broker 89,656 -
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Net assets available for benefits $112,973,009 $94,885,060
======================================
See accompanying notes.
2
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UIC 401(k) Retirement Savings Plan
Statements of Changes in Net Assets Available for Benefits
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1999 1998
----------------------------------------
<S> <C> <C>
ADDITIONS
Investment income:
Net realized and unrealized appreciation in aggregate fair
value of investments $ 6,897,790 $ 12,611,589
Interest and dividends 8,903,858 5,058,775
----------------------------------------
15,801,648 17,670,364
Contributions:
Employee 6,128,017 5,354,917
Employer 1,492,659 1,878,406
Rollovers 746,115 312,671
----------------------------------------
8,366,791 7,545,994
----------------------------------------
Total additions 24,168,439 25,216,358
DEDUCTIONS
Benefit payments 6,080,490 5,649,872
----------------------------------------
Net increase 18,087,949 19,566,486
Net assets available for benefits at beginning of year 94,885,060 75,318,574
----------------------------------------
Net assets available for benefits at end of year $112,973,009 $ 94,885,060
========================================
</TABLE>
See accompanying notes.
3
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UIC 401(k) Retirement Savings Plan
Notes to Financial Statements
Years ended December 31, 1999 and 1998
1. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the UIC 401(k) Retirement Savings Plan (the "Plan")
have been prepared on the accrual basis of accounting.
INVESTMENT VALUATION AND INCOME RECOGNITION
Investments in mutual funds are reported at current redemption value. The United
Industrial Corporation Common Stock is reported at fair value, based on
published market prices. Participant loans represent the outstanding principal
balances of the loans and are valued at cost, which approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
that affect amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
2. DESCRIPTION OF THE PLAN
GENERAL
The Plan is a defined contribution plan. The purpose of the Plan is to encourage
employees to save regularly and to provide additional funds upon retirement.
United Industrial Corporation (the "Company" or "Employer") is the named
fiduciary, which controls and manages the operations of the Plan and acts as
Administrator. The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA).
Additional information about the Plan and the vesting and benefit provisions is
contained in the Plan Document of the UIC 401(k) Retirement Savings Plan. Copies
are available from the Human Resources Department of the Company.
4
<PAGE>
2. DESCRIPTION OF THE PLAN (CONTINUED)
ELIGIBILITY
Effective July 1, 1998, all full-time employees are eligible to participate in
the Plan upon being hired, or if later, attainment of age 18. Part-time
employees who have attained the age of 18 are eligible to participate in the
Plan upon completion of 1,000 hours of service during their first 12 months of
employment. If 1,000 hours of service are not completed during the first 12
months of employment, a part-time employee may participate when they have
completed 1,000 hours of service during a Plan year. Prior to July 1, 1998, all
employees aged 21 or more who had completed one year of continuous employment,
consisting of at least 1,000 hours, with the Company (including its
participating subsidiaries) were eligible to participate in the Plan.
CONTRIBUTIONS
Participating employees contribute to the Plan through payroll deductions in
amounts not less than 2% of their earnings, and for certain participants from 2%
to 15% of their earnings, up to the annual IRS limit. Contributions to the Plan
are invested in the following available investment options in accordance with
the participants' elections; Fidelity Magellan Fund, Fidelity Managed Income
Portfolio, Fidelity Retirement Government Money Market Fund, Fidelity Growth and
Income Fund, Fidelity Contrafund, Fidelity Investment Grade Bond Fund, United
Industrial Corporation Common Stock Fund, Templeton Foreign A Fund, Invesco
Total Return Fund, Fidelity Low Priced Stock Fund, and Spartan US Equity Index
Fund. All employee contributions to the Plan are immediately vested.
Employer contributions are 50% of employees' contributions up to 4% of employee
compensation, and for certain participants 50% of employees' contributions up to
6% of compensation, as defined in the Plan Document. Employer contributions are
vested after five years of service. Effective January 1, 1998, the Plan was
amended to repeal the discretionary profit sharing provision of employer
contributions.
Employer contributions on the statement of changes in net assets available for
benefits for the year ended December 31, 1998 include approximately $350,000 of
profit sharing contributions related to 1997.
5
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UIC 401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
PAYMENT OF BENEFITS
On termination of service or attainment of 59 1/2 years of age, any participant
may elect to immediately receive a lump-sum distribution equal to his or her
vested account balance.
PARTICIPANT LOANS
Participants may borrow from their fund accounts up to 50% of their vested
account balance subject to a minimum of $1,000 and a maximum of $50,000. The
loans are secured by the balance in the participant's account and bear interest
at a rate determined by the Company. Principal and interest is paid ratably
through payroll deductions and must be repaid over a period not to exceed 60
months, except in the case of a purchase of a primary residence.
PARTICIPANT ACCOUNTS
Each participant account is credited with the participant's contributions and an
allocation of (a) the Employer's contributions and (b) investment income.
Allocations are based on account balances. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's account.
ADMINISTRATIVE EXPENSES
Administrative expenses associated with the Plan, including the amount paid to
Fidelity Management Trust Co. for acting as custodian of the investments of the
Plan, were paid by the Company in 1999 and 1998.
PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination,
participants will become 100 percent vested in their accounts.
6
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UIC 401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
3. INVESTMENTS
During 1999 and 1998, the Plan's investments (including investments bought, sold
as well as held during the year) appreciated (depreciated) in aggregate fair
value as determined by quoted market prices as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1999 1998
------------------------------------------
<S> <C> <C>
Mutual funds $ 6,964,100 $12,666,876
United Industrial Corporation common stock (66,310) (55,287)
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Total net realized and unrealized appreciation in
aggregate fair value $ 6,897,790 $12,611,589
==========================================
Investments that represent 5% or more of fair value of the Plan's net assets are
as follows:
DECEMBER 31
1999 1998
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Fidelity Magellan Fund $49,170,483 $38,403,907
Fidelity Managed Income Portfolio 19,858,963 18,921,786
Fidelity Growth & Income Fund 18,876,244 18,374,335
Fidelity Contrafund 13,524,003 10,069,014
</TABLE>
4. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated January 16, 1996, stating that the Plan is qualified under Section 401(a)
of the Internal Revenue Code (the "Code") and, therefore, the related trust is
exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Plan Administrator
believes the Plan is being operated in compliance with the applicable
requirements of the Code and, therefore, believes that the Plan is qualified and
the related trust is tax exempt.
7
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UIC 401(k) Retirement Savings Plan
EIN: 95-2081809
Plan # 002
Schedule H, Line 4i -
Schedule of Assets Held for Investment Purposes at End of Year
December 31, 1999
<TABLE>
<CAPTION>
DESCRIPTION CURRENT
IDENTITY OF ISSUE OF INVESTMENT COST** VALUE
-------------------------------------------------------------------------------------------------------------
<S> <C> <C>
*Fidelity Management Trust Company Cash
Reserve Fund $ 18,218
*Fidelity Magellan Fund 359,881 Shares 49,170,483
*Fidelity Managed Income Portfolio 19,858,963 Shares 19,858,963
*Fidelity Retirement Government Money Market
Fund 3,079,105 Shares 3,079,105
*Fidelity Growth & Income Fund 400,260 Shares 18,876,244
*Fidelity Contrafund 225,325 Shares 13,524,003
*Fidelity Investment Grade Bond Fund 222,960 Shares 1,536,196
*United Industrial Corporation Common Stock 81,162 Shares
Fund 750,749
Templeton Foreign A Fund 66,734 Shares 748,754
Invesco Total Return Fund 12,957 Shares 375,234
*Fidelity Low Priced Stock Fund 31,886 Shares 721,897
Spartan US Equity Index Fund 43,903 Shares 2,286,920
*Participant loans Interest rates from 7% to
14.5%; maturities to
December, 2013 1,936,587
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Total assets held for investment purposes $ 112,883,353
==================
</TABLE>
*Party in interest
**Historical cost is not required to be presented as all investments are
participant-directed
8
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the 401(k) Committee of the United Industrial Corporation 401(k) Retirement
Savings Plan (the "Plan"), which administers the Plan, has duly caused this
annual report to be signed on its behalf by the undersigned, hereunto duly
authorized, on the 27th day of June, 2000.
By: /s/ James H. Perry
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James H. Perry
Committee Member
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
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23.1 Consent of Independent Auditors
